Brazil’s central bank said additional monetary policy stimulus will fail to boost economic growth that is recovering more slowly than expected due to limited supply.
Policy makers, in the minutes to their Jan. 15-16 meeting published today, said the balance of risks for inflation has worsened and reiterated that the best policy for bringing consumer price increases to the 4.5 percent target is to keep rates at a record low for a “sufficiently prolonged period.”
While inflation is slowing in Mexico and Chile, price pressures are building in Brazil as demand remains robust amid record low interest rates and unemployment. At the same time, a contraction in investment and industrial output is offsetting President Dilma Rousseff’s efforts to revive the slowest growth in three years by stimulating consumption.
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